3788.HK WACC - Weighted Average Cost of Capital

The WACC of China Hanking Holdings Ltd (3788.HK) is 9.7%.

The Cost of Equity of China Hanking Holdings Ltd (3788.HK) is 10.95%.

The Cost of Debt of China Hanking Holdings Ltd (3788.HK) is 6.70%.

	Range	Selected
Cost of equity	9.30% - 12.60%	10.95%
Tax rate	34.50% - 40.70%	37.60%
Cost of debt	4.10% - 9.30%	6.70%
WACC	8.1% - 11.3%	9.7%

WACC

3788.HK WACC calculation

Category	Low	High

Long-term bond rate	2.9%	3.4%
Equity market risk premium	6.0%	7.0%
Adjusted beta	1.07	1.25

Additional risk adjustments	0.0%	0.5%
Cost of equity	9.30%	12.60%

Tax rate	34.50%	40.70%
Debt/Equity ratio	0.22	0.22
Cost of debt	4.10%	9.30%

After-tax WACC	8.1%	11.3%


Selected WACC	9.7%

3788.HK's CAPM model and how its cost of Equity is calculated

The Cost of Equity reflects the return a company needs to deliver to shareholders to justify the risk of investing in its shares. It’s computed using the Capital Asset Pricing Model (CAPM), which blends the risk-free rate, the stock’s beta, and the market risk premium.

This method evaluates the stock’s risk compared to a safe investment and the market’s overall volatility.

Here’s how we figure out the cost of equity for 3788.HK:

cost_of_equity (10.95%) = risk_free_rate (3.15%) + equity_risk_premium (6.50%) * adjusted_beta (1.07) + risk_adjustments (0.25%)

We include the risk adjustments, which range from 0% to 1%, to keep our WACC conservatives, especially for companies traded in developing markets.